Abstract

http://ssrn.com/abstract=277248
 
 

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Productivity Growth in the 1990s: Technology, Utilization, or Adjustment?


John G. Fernald


Federal Reserve Bank of San Francisco

Susanto Basu


Boston College, College of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Matthew D. Shapiro


University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

June 9, 2001

FRB of Chicago Working Paper No. 2001-04

Abstract:     
Measured productivity growth increased substantially during the second half of the 1990s. This paper examines whether this increase owes to an increase in the rate of technological change or whether it can be explained by non-technological factors relating to factor utilization, factor accumulation, or returns to scale. It finds that the recent increase in productivity growth does appear to arise from an increase in technological change. Cyclical utilization raised measured productivity growth relative to technology growth in the first part of the expansion, but lowered it subsequently. Factor adjustment leads to a steady-state understatement of technology growth by measured productivity growth. The understatement was greater in the second half of the expansion than the first. Changes in the distribution of inputs across industries with different returns to scale lead to a modest understatement in the growth in technology. Although the increase technological change is most pronounced in durable manufacturing, technological change also increased outside of manufacturing.

Number of Pages in PDF File: 62

JEL Classification: E22, O30, O47

working papers series


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Date posted: July 21, 2001  

Suggested Citation

Fernald, John G. and Basu, Susanto and Shapiro, Matthew D., Productivity Growth in the 1990s: Technology, Utilization, or Adjustment? (June 9, 2001). FRB of Chicago Working Paper No. 2001-04. Available at SSRN: http://ssrn.com/abstract=277248 or http://dx.doi.org/10.2139/ssrn.277248

Contact Information

John G. Fernald (Contact Author)
Federal Reserve Bank of San Francisco ( email )
101 Market Street
San Francisco, CA 94105
United States
415-974-2135 (Phone)
HOME PAGE: http://www.frbsf.org/economics/economists/jfernald.html
Susanto Basu
Boston College, College of Arts and Sciences, Department of Economics ( email )
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3806
United States
617-552-2308 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Matthew D. Shapiro
University of Michigan at Ann Arbor - Department of Economics ( email )
and Survey Research Center
611 Tappan Street
Ann Arbor, MI 48109-1220
United States
313-764-5419 (Phone)
313-764-2769 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
313-764-5419 (Phone)
313-764-2769 (Fax)
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